Are you new to the world of key performance indicators used in the outsourcing industry? This article offers you an in-depth look at the NPS KPI. Net Promoter Score Time or NPS is a key metric used by businesses across the globe to monitor customer satisfaction and brand loyalty. Continue reading to learn more.

• What is NPS?
• Why is NPS KPI important?
• What are the benefits offered by NPS?
• How is NPS KPI calculated?
• What is a good NPS score?
• How do you analyze NPS data?
• How to optimize NPS?
• Is NPS an important KPI?

What is NPS?

Net Promoter Score or NPS measures how likely a customer will recommend the brand to someone else. It is a primary metric used by businesses to measure brand loyalty and customer satisfaction. In fact, the Net Promoter Score is a valuable tool.

Customer loyalty plays an important role in the success of a brand. When customer satisfaction is high, NPS scores also tend to be high. This results in better customer retention. In turn, this leads to better sales figures.

Additionally, the NPS scores enable businesses to analyze business strategies. This helps in business growth and expansion. A high NPS score improves the chances of a business performing better than its competitors as well.

Businesses rely on several KPIs to measure the performance of a support team. Furthermore, this comes in handy when we outsource support. These KPIs measure different factors like customer satisfaction, response time, resolution time, customer loyalty, and so on.

Businesses can create a strategy to help them reach their goals with the help of these KPIs.

The NPS score is calculated by asking customers a few survey questions that include the following question as well:

“How likely are you to recommend this brand or company to friends or family?”

The replies are collected in the form of scores between 0-10 with 10 being the highest. These responses are then collated and categorized into three different categories:

• Promoters
• Passives
• Detractors

By understanding the NPS score, businesses can tweak their strategies appropriately. In fact, they can use take the help of Promoters to improve their NPS score. One of the biggest advantages of outsourcing to a third party is that they are well-versed in getting high NPS scores. For instance, outsourcing companies like Bobcares offer high NPS scores.

Why is NPS KPI important?

Did you know that NPS KPI is an important metric for organizations? Let’s take a quick look at why the NPS score is important:

• NPS helps identify detractors.

  One of the biggest benefits of the NPS score is how it helps us identify detractors. It helps businesses identify unhappy customers. Following up with these customers and finding the reason behind their dissatisfaction is an important step.

  In other words, it helps businesses narrow down areas where they need to improve. After all, a low NPS score clearly indicates a gap between business services and customer expectations.
• It helps acquire new customers.

  As NPS helps us identify promoters, we can request them to share a review or testimonial. Since people tend to trust word-of-mouth reviews more, potential customers are likely to line up when NPS scores are high. Ensuring high NPS scores helps businesses acquire new customers easily.
• It can be used to learn about customer behavior.

  There are various questions on the NPS survey. These responses are compiled into reports. These reports aid in understanding consumer behavior trends.
• NPS opens a channel for communication.

  NPS offers businesses a new communication channel. This helps businesses to understand customer expectations better. It also offers an idea of the business outlook.

  The open-ended questions in the NPS survey help businesses come up with new ideas. Additionally, it helps improve their existing products or services.

What are the benefits offered by NPS?

The benefits offered by NPS KPI are massive. Let’s take a look at some of these advantages:

• It measures the chances of repeating customers.

  One of the main advantages of using the NPS score is that it gives a direct picture of customer satisfaction. Unlike other KPIs, the NPS metric predicts new and repeat business. This comes in handy in forecasting business growth. It helps monitor the health of the brand and keep an eye on customer satisfaction.
• It is simple and user-friendly.

  NPS surveys are often simple and user-friendly. It can be done via email, live chat, or phone. All of these surveys consist of the main question:

  “How likely are you to recommend this business to a friend?”

  This question is followed by two or three additional questions. These questions help gather further feedback. Additionally, the survey takes up only a few minutes. This makes it easier for customers.

  On top of that, NPS helps businesses classify customers into three different groups. We can determine the score with a simple calculation. Outsourcing companies rely on NPS scores to measure the performance of the support team.
• It helps track change over time.

  Industry experts recommend monitoring NPS. This helps keep track of customer satisfaction levels. In fact, businesses that outsource their support to a third party rely on NPS to measure their performance.

  A dip in the NPS score indicates a dip in customer satisfaction. This helps businesses keep their eye on the ball and improve their services and products.

How is NPS KPI calculated?

NPS KPI can be easily calculated. The first step involves sending customers a survey that includes a variation of the following question:

“How likely are you to recommend us on a scale of 0-10?”

Based on the replies, these customers are classified into three different groups as seen below:

• Promoters:

  They offer a score between 9-10. The promoters are very likely to recommend the brand to friends or family.
• Passives:

  This category is considered neutral. They usually offer a score between 7-8.
• Detractors:

  These customer offer scores between 0-6. They are least likely to promote the brand.

The NPS score is calculated as seen below:

Since the NPS KPI relies on surveys, businesses need to send out surveys periodically. For instance, some companies send out NPS surveys after a live chat or email conversation. This also helps get instant feedback.

For instance,

If 74% of the responses belong in the promoters category and 20% in the detractor category. In this scenario, the NPS score is 54%.

What is a good NPS score?

According to industry experts, a score from 0-30 is considered good. However, a score above 30 is deemed a high NPS score. Furthermore, the NPS KPI benchmark values change according to the industry.

An NPS score below 0 clearly indicates the business is in trouble. It is time for the business to take a long look at its strategies. When NPS drops below zero, customer satisfaction also drops drastically.

Businesses have to keep a close on their NPS score and tweak their strategies to prevent this from happening. After all, NPS is a reflection of customer loyalty and trust in the brand.

In case the NPS KPI value is over 30, it means that the business is doing well. Businesses can focus on the promoters to find out what they are doing right. Furthermore, talking to detractors offers them an insight into what the business needs to get right.

Outsourcing firms often follow up with promoters and detractors to get further feedback. This goes a long way in coming up with a business plan that improves customer satisfaction.

An NPS score over 70 is considered exceptionally good. If a business achieves this score, it can expect plenty of referrals and returning customers.

How do you analyze NPS data?

As mentioned earlier, the NPS survey respondents are classified into three groups based on their scores. Then we can get the NPS score by subtracting the percentage of detractors from the percentage of promoters. Analyzing the NPS score is considerably easy as mentioned above.

Most businesses consider NPS as the gold standard metric when it comes to customer satisfaction. Hence, analyzing NPS data plays a key role. In fact, this helps businesses identify how happy customers are with the brand, services, or products.

The NPS survey is made up of multiple-choice and open-ended questions. The replies to the latter help understand promoters’ and detractors’ perspectives. In other words, the open-ended questions help customers mention the reason behind the scores they have given.

Unlike NPS scores, analyzing open-ended replies is more complex. Reliable outsourcing companies go through each response and collect insights. This helps them improve their support service, leading to improved customer satisfaction.

Here are a few ways to analyze open-ended NPS survey replies:

• Classify the responses to open-ended questions.
• Examine NPS data according to demographic data.
• Identify the root causes behind the open-ended NPS replies.
• Use the NPS data to identify trends and patterns.

How to optimize NPS?

With customer satisfaction playing an important role in the success of any business, it is time to improve the NPS KPI value. Here are five different ways to improve the Net Promoter Score metric.

• Improve customer experience

  Since NPS measures customer satisfaction, we can improve the score by improving the customer experience. In fact, focusing on customer experience is a sure-shot way to improve brand loyalty as well as NPS scores.

  Businesses that implement customer-centric strategies often score high NPS values compared to their competitors. According to industry experts, identifying customer needs is the best way to improve customer experience.
• Offer great customer support

  It goes without saying that excellent customer support has a huge say on NPS score values. If your business is not currently able to offer stellar customer support, outsourcing is a great option.

  This ensures top-notch customer support at a fraction of the prices. For instance, Bobcares is a leading outsourcing company known for its excellent support service.
• Offer quick responses

  One way to ensure high NPS scores is by offering quick responses to customers over customer support. Waiting for a long time for a reply often leaves a bad taste, resulting in low NPS scores. Hence, improving the response time goes a long way in increasing NPS KPI scores.
• Create different strategies for each customer segment.

  Another way to improve the NPS score is by segmenting the audience and creating separate strategies. This helps businesses focus on marketing, sales, and services for each segment. Furthermore, this makes it easier to understand customers and their requirements.
• Monitor scores regularly

  Measuring customer feedback regularly helps businesses keep their finger on the pulse. This ensures that a dip in the score does not go unnoticed. In case the scores start dipping, immediate measures will make sure it doesn’t affect the NPS KPI.

Is NPS an important KPI?

Generally, NPS improves customer experience. Businesses with high NPS scores have more referrals and returning customers. In fact, the NPS KPI plays a critical role in improving brand loyalty and strengthening customer relations. After all, better customer relations lead to happier customers. This results in high NPS scores.

Additionally, the NPS score helps businesses reach their goals faster. The real-time data offered by NPS KPI comes in handy in ensuring customer satisfaction. Although there are several KPIs to focus on, NPS is a key metric. Businesses and outsourcing firms rely on it to measure customer satisfaction and brand loyalty.

Conclusion

At the end of the day, the Net Promoter Score has an important role to play in business growth. In fact, businesses and outsourcing firms like Bobcares rely on this key metric. After all, no other metric can measure brand loyalty as well as NPS KPI.

By focusing on customer satisfaction, businesses are able to achieve their targets faster. After all, happy customers are more likely to recommend the brand, product, or service to others. These referrals generate new leads, which can increase sales.

It is no surprise that the NPS metric is a game changer for many companies. It offers an insight into the customers’ minds. In fact, this metric helps make data-driven decisions that benefit the business in the long run.

Also, the replies to other questions in the NPS survey are also important. By studying the replies, businesses and outsourcing companies can come up with new ways to improve customer satisfaction.

To conclude, the Net Promoter Score or NPS is an important metric. It is time for businesses to embrace this KPI and work on improving it. Let us know in the comments how NPS has helped turn your business around.